Brussels Takes Spain to the CJEU Over Failure to Implement Several VAT Directives on Time
The European Commission has decided to refer Spain to the Court of Justice of the European Union (CJEU) for failing to transpose into national legislation two EU directives relating to VAT before the deadline established by Brussels.
According to the statement issued this Friday by the European Executive, Spain is currently the only Member State that has not yet incorporated these tax provisions, which are intended to modernise certain VAT regimes, simplify administrative obligations and prevent distortions of competition within the Single Market.
The Commission is also requesting that the CJEU impose financial penalties on Spain due to the accumulated delay.
Directive (EU) 2020/285
One of the infringement procedures concerns Directive (EU) 2020/285, focused on the simplification of VAT rules for small and medium-sized enterprises (SMEs). The directive aims to reduce tax compliance costs, facilitate cross-border business activity and improve supervisory control by tax authorities.
Spain informed Brussels that it does not intend to apply the SME VAT exemption provided for under the directive, as such measure remains optional for Member States. However, the European Commission recalls that Spain is nevertheless required to implement the necessary mechanisms enabling Spanish companies to benefit from those exemptions in other EU jurisdictions.
In practical terms, Brussels considers it essential that Spanish SMEs be allowed to register before the national tax authorities in order to subsequently access those special VAT schemes in other Member States.
The second infringement case concerns Directive (EU) 2022/542, relating to amendments affecting VAT rates and certain special VAT arrangements.
Among other matters, this legislation regulates the tax treatment applicable to digitally supplied or virtually transmitted services, as well as the special VAT scheme governing second-hand goods, works of art, antiques and collectors’ items.
Risks of Double Taxation or Non-Taxation
The Commission warns that the failure to adapt these rules may create risks of double taxation or even situations of non-taxation, given that the remaining Member States are already applying the new European VAT framework.
Brussels also warns of potential distortions of competition in sectors such as the art market, antiques and second-hand goods.
Member States were required to adopt and notify these transposition measures before 31 December 2024.
Formal Notice Without Official Response
In the absence of corrective measures by Spain, the Commission issued a letter of formal notice on 31 January 2025, followed by a reasoned opinion on 17 July 2025. However, according to Brussels, the Spanish authorities have still not officially notified the incorporation of both directives into domestic law.
With this step, the dispute now enters the European judicial phase and could ultimately lead to financial sanctions against Spain should the CJEU conclude that the country has failed to comply with its obligations under EU law.
Source: European Commission.